Pentagon executives yesterday peppered Congress and contractors with rubber bullets at a news conference designed to explain why the Army does not have enough engines for the M1 tanks now coming off the production line.

The joint appearance of Lawrence J. Korb, assistant secretary of defense for manpower, reserve affairs and logistics, and Army Undersecretary James R. Ambrose marked the first time in the Reagan administration that the Pentagon has launched a frontal assault on Congress for restricting its managers' freedom.

But Korb and Ambrose did not fire anything very lethal at the lawmakers or the offending contractor, the Avco Corp., whose Lycoming Division builds the tank engines in Stratford, Conn.

Both Defense executives complained that the House and Senate Armed Services Committees, in hammering out the fiscal 1984 defense authorization bill, prohibited the Army from letting another company join Avco in building M1 tank engines.

Ambrose said that keeping Avco as the sole source had the "appearance of special-pleading legislation."

But when asked, neither he nor Korb would recommend that President Reagan veto the procurement bill to protest freezing out competition on the engine contract, worth about $275,000 a year to Avco.

Ambrose fretted all through the unusual Pentagon briefing about Avco's unwillingness to build the tank engines on the schedule the Army had requested, delivery 75 days ahead of when the engine is to be installed in the tank by General Dynamics. But he did not threaten to cancel that contract or any other the firm has with the department.

Because Avco does not give the Army the 75-day lead time, Ambrose said, the Army often has to rip engines out of brand-new tanks so there will be enough on hand to keep General Dynamics' production line moving, and meet Pentagon contract obligations to General Dynamics.

Ambrose said that Congress will make a bad situation worse if the authorization bill, which would increase M1 tank production from 60 to 70 a month, becomes law. Switching engines from one tank to another has cost "well over $1 million so far," he said.

Ambrose declined to name lawmakers he feels are responsible for Avco's lock on the engine business, but he observed that if the work were split with the Garrett Corp., the Army's choice for a second source, there would be fewer jobs for Connecticut.

The "no second source" language was born in the House Armed Services subcommittee on procurement, chaired by Rep. Samuel S. Stratton (D-N.Y.). Members argued within the subcommittee and the full committee and on the House floor that splitting the engine business would save neither money nor time--and that the Northeast has gotten short shrift on military contracts in the past and should keep this one.

Rep. Norman D. Dicks (D-Wash.), a member of the House Appropriations subcommitee on defense, led the floor fight against the sole-source provision. Last year, he had urged the Army to turn to a second company, given the problems with Avco. The Army did little to help Dicks in his floor battle, according to his aides, who said it failed to reinforce him at critical moments during the debate.

Dicks' amendment to strike the second-source prohibition from the fiscal 1984 authorization bill lost, 24l to 187. Ninety-seven Republicans joined with 144 Democrats to keep Avco as the sole source. That House position prevailed in the conference on the bill, which has not yet gone back to the House and Senate for final approval.

Still another fight on whether to split a big defense contract is looming. At stake is $14 billion for the improved aircraft engines that would power the F15 and F16 fighters in the future.

The Air Force has been conducting a competition between the General Electric Co. and Pratt & Whitney Aircraft Group of United Technologies Corp. in hopes of driving down the price and getting a better engine.

But the special investigations unit of the House Appropriations Committee, which has urged more competition in defense contracting, recently weighed in with a report warning that the fighter-engine competition may cost more than it saves.

Summing up the dilemma, one 20-year veteran of military- contracting wars said, "No pancake is so flat that it doesn't have two sides. Sometimes competition is good for the country, sometimes it's bad."